On the Urbanization of Poverty

Abstract

The poor urbanize faster than the population as a whole. But experience across countries suggests that a majority of the poor will still live in rural areas long after most people in the developing world live in urban areas.

Ravallion identifies conditions under which the urban sector's share of the poor population in a developing country will be a strictly increasing and strictly convex function of its share of the total population. Cross-sectional data for 39 countries and time-series data for India are consistent with the expected theoretical relationship.

The empirical results imply that the poor urbanize faster than the population as a whole. But the experience across developing countries suggests that a majority of the poor will still live in rural areas long after most people in the developing world live in urban areas.

This paper - a product of Poverty, Development Research Group - is part of a larger effort in the group to monitor overall trends in poverty in developing countries. The author may be contacted at [e-mail].